Overall intervention remains low. But new and strengthened regimes and proposals to bolster the EU FDI cooperation mechanism, plus heightened scrutiny of foreign investments involving critical technologies and defense, are creating a more complex enforcement outlook and, for sensitive deals, longer review timelines. For cross-border investors, the practical implications include a higher likelihood of multi-jurisdictional filings, more detailed information requests, notably in technology-adjacent sectors, and an increased need to plan for mitigation commitments early in the deal timeline.
Stability in EU-wide enforcement
During 2024, member states handled a total of 3,136 requests for authorization and ex-officio casesa significant increase of nearly 75% from 2023.
Only 41% of these cases were formally screened, down from 56% in 2023. However, this dip is largely explained by Sweden, which reported a “very high” number of cases in its FDI screening mechanism’s first full year of operation due to its broad scope and market education effects. If Swedish activity is excluded, the share of cases formally screened rises to 67%.
Sweden’s experience may settle over time, but it also previews what newer or expanding regimes can look like as they bed in.
Of the cases decided across the EU:
- The vast majority—86%—continued to be cleared unconditionally.
- Conditions or mitigating measures were imposed in 9% of decided cases, broadly in line with 2023 and 2022.
- Only 1% of cases were ultimately blocked (and 4% were withdrawn before a final decision was made), consistent with the previous two years.
The EC notes that the data show “a stable trend”, confirming that the EU remains open to foreign investment and that member states only block cases that pose very serious threats to security or public order. Not mentioned by the EC, but equally relevant, is that national authorities may also be driven by the political sensitivity of some deals.
Activity under the EU cooperation mechanism
The report goes on to analyze action taken under the EU FDI Screening Regulation. This regulation establishes a cooperation framework requiring member states to inform other member states and the EC when they receive a filing under their national FDI regime.
The final decision on whether to approve an investment lies with the member state(s) in which the investment is notified. However, national authorities must consider any comments received from other member states as well as any opinion issued by the EC following its assessment.
Notably, 50% of cases subject to a detailed EC phase 2 security risk assessment related to manufacturing (which includes the manufacturing of electrical equipment, defense equipment and pharmaceuticals). These interventions were often triggered by EC concerns about “potential technology or knowledge leakage, as well as security of supply issues”—covering, e.g., defense-related activities, semiconductors, and aerospace. This is a considerable jump from 39% in 2023.
This shift shows that the EC is increasingly focused on supply-chain resilience and risks linked to dual-use or enabling technologies, even when the deal does not directly involve critical infrastructure.
Additionally, during 2024:
- 477 notifications were made under the cooperation mechanism, slightly down from 488 in 2023 but an overall 15% increase since 2021. The EC notes that the number reflects the fact that the mechanism remains “highly relevant.”
- Transactions were notified by 21 member states—up from 13 in 2021—suggesting growing familiarity and engagement with the process.
- The main jurisdictions of origin of ultimate investors were the U.S. (40%), the UK (11%), China (including Hong Kong) (9%), Japan (4%), Canada (3%), and the UAE (3%). The U.S. and China recorded significant increases compared to 2023 (respectively, 7 and 3 percentage points).
- The EC closed 92% of cases following a preliminary phase 1 assessment, i.e., within 15 working days. This is the same share as in 2023 and gives most transacting parties comfort that their FDI review periods are unlikely to be delayed by EC scrutiny.
- Only 8% of cases were subject to a phase 2 assessment by the EC, with the authority issuing an opinion in less than 2%. This is consistent with 2023. The EC reiterates that the cooperation mechanism is continuing to operate as a “limited and targeted tool for exceptional cases” where an FDI is likely to negatively affect security or public order.
- 10% of cases triggered questions from other member states while just 3% received comments. The number of comments issued was well below the 2023 share of 6%. It suggests that replies to questions alleviated potential concerns in most cases.
Continued expansion across the EU
The spread of FDI regimes across the EU is near complete. 25 EU member states now have national screening mechanisms in place. In 2025, new regimes have so far entered into force in Ireland, Greece, and Bulgaria.
Of the remaining two member states, a new regime is expected to become operational in Croatia by the end of October 2025, and draft rules are in the pipeline in Cyprus.
In addition, following Russia’s invasion of Ukraine and increased geopolitical uncertainty, member states have continued to update, strengthen, and expand existing regimes. For example, in July 2025, Poland shifted responsibility for reviews to a government minister and made permanent provisions introduced in response to the Covid-19 pandemic.
All eyes on EU FDI Screening Regulation review
Plans to overhaul key aspects of the EU cooperation mechanism are progressing, but it has not been plain sailing.
In January 2024, the EC presented a legislative proposal to revise the FDI Screening Regulation. The EC aims to tackle “regulatory fragmentation” by:
- ensuring that all member states put in place screening mechanisms
- introducing a common minimum scope and a minimum harmonization of national mechanisms
- bringing EU-based investors ultimately controlled by non-EU entities within the screening scope
- strengthening cooperation and improving accountability between member states and the EC.
However, clear divergence in the positions of its co-legislators, the European Parliament and the European Council, will have made negotiating a final revised text over the last few months difficult. Their opinions differ, in particular, on the degree of harmonization required, the scope of the sectors that should be subject to mandatory screening, and the amount of discretion given to member states vis-à-vis the EC.
Negotiations are ongoing. If adopted broadly as proposed, the reforms would materially expand the number of deals subject to screening, especially those involving EU‑based funds or holding structures with non‑EU ultimate control. This could lead to more consistent, but potentially stricter, review standards across the EU.
Separately, the EC flags its ongoing review of EU outbound investments. In January 2025, the EC adopted a recommendation calling on member states to scrutinize their companies’ investments in non-EU countries. It applies to three sectors the EC considers to be of strategic importance and highest risk: semiconductors, artificial intelligence, and quantum technologies. Comprehensive member state reports are due by June 30, 2026.
Together with inbound FDI screening, this initiative reflects a broader shift toward a more integrated “economic security” framework, which could affect both sides of a company’s portfolio: acquisitions and divestments.
We will update you as we learn more.
What this means for transactions
1. Expect broader scope and earlier filing triggers
With more regimes in place and active cooperation channels, deal teams should anticipate filings (or call-in risks) in multiple member states for targets linked to sensitive technologies, defense supply chains, or critical manufacturing.
2. Prepare for deeper diligence on tech and supply chains
Phase 2 reviews in manufacturing highlight growing concerns around knowledge leakage and supply security. Buyers should review the technologies involved, any R&D partnerships, export controls, and key suppliers or customers early on to be ready for questions from authorities.
3. Plan ahead for mitigation
Although most deals are still cleared without conditions, we are seeing a growing number of conditional approvals in some jurisdictions and authorities increasingly considering behavioral remedies (e.g., governance, access, data handling, supply commitments). Building credible mitigation strategies early can help avoid delays.
4. Consider ultimate control in deal structuring
Proposed reforms would bring EU-based investors under review if they are ultimately controlled by non-EU entities. Sponsors should review fund structures, investor rights, and co-investor arrangements to see if control or influence could trigger a filing.
